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Can Kim Kasdashian Save Glu Mobile, Again?

By Rick Munarriz – Sep 23, 2016 at 10:49AM

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The mobile gaming app publisher extends its deal with the reality television star.

Image source: Glu Mobile.

The most successful gaming app star in Glu Mobile's (GLUU) roster will be sticking around a little longer. Glu Mobile is extending its licensing agreement with Kim Kardashian, pushing out their partnership through mid-2020. The 8-K filing with the SEC on Thursday details the refreshed agreement that was previously extended through June 30, 2019.

The stock didn't move on the news. It's fair to say the fickle nature of both reality television celebrityhood and mobile gaming make it hard to see the impact a deal will have three to four years from now. However, it does keep the star of Glu Mobile's breakout 2014 hit Kim Kardashian: Hollywood around a little longer, and that's rarely a bad thing. 

Keeping up with the mobile gamers

It's not easy to stay on top when it comes to mobile gaming. The original licensing deal with Kardashian was signed in 2013, and it paid off a year later when Kim Kardashian: Hollywood briefly raced to the top of the app download charts that summer. The "freemium" game where players get chummy with Kardashian as they rise up the ranks of Hollywood elite was a smash hit, and the celebrity simulator resulted in Glu revenue more than doubling in 2014. 

The app's success paved the way for Glu Mobile to ink exclusive mobile gaming deals with other celebrities, including Britney Spears, Taylor Swift, and Gordon Ramsay. It seemed so easy at the time. All Glu Mobile would have to do is team up with millennials-magnetic celebrities with millions of social media followers, strike licensing deals and put out mobile experiences similar to Kim Kardashian: Hollywood.

It didn't pan out that way. Katy Perry Pop lacked "fireworks" late last year. An attempt to keep it within the Kardashian family with this year's release of Kendall & Kylie -- based on Kim Kardashian's popular half sisters -- couldn't duplicate the original game's success.

Things have been rough for Glu Mobile shareholders. The stock has shed more than 70% of its value since peaking during 2014's summer of Kim Kardashian: Holllywood. It has posted a loss in four of the past five quarters, and revenue has experienced a sequential decline for three straight quarters. 

Glu Mobile continues to crank out games. Ramsay and Spears eventually got their animated likeness out there. The mobile app publisher is also about more than just celebrity tie-ins. There are cult followings for its Deer Hunter and Tap Sports franchises. However, it's going to need another monster hit to make it happen. The deal with Kardashian opens the door for new titles beyond updates to the Kim Kardashian: Hollywood juggernaut. Investors and prospective investors will want to keep tabs on the app download charts to be ready the next time a new release resonates with smartphone-wielding gamers. 

Rick Munarriz has no position in any stocks mentioned. The Motley Fool has no position in any of the stocks mentioned. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy.

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